SACRAMENTO, Calif. — In an effort to get back billions in unemployment fraud, California's Employment Development Department (EDD) is asking 1.4 million people to submit proof in order to keep the money they already got. However, many people have not responded.
EDD said only one in five people have responded to the requests so far from November. That means over a million people have not.
At the beginning of the pandemic, the federal government created the “Pandemic Unemployment Assistance” (PUA) program to help people who wouldn’t typically qualify for unemployment checks, like people who are self-employed or independent contractors.
“The government, not just in California, but elsewhere, decided we better just get these people help, because as you recall, the economy nosedived like it hasn't before in our lifetimes,” said McClatchy's David Lightman, who has covered California politics and EDD for decades.
However, fast action left room for error.
“A lot of scammers realized, 'Hey, this is an easy way to make money," he said. "In fact, California looks like it's lost an estimated $20 billion through fraud. Now, that's not state money. It's federal money. But nonetheless, the program was managed by EDD.”
Now, the EDD, at the demand of the federal government, is backtracking. They're asking those that received money from the PUA to submit proof.
“It's just saying, 'Hey, you're going to have to provide us some kind of document, just validating what you've told us that you were working, or were self-employed, or had plans to be," EDD spokewoman Loree Levy said. "And if we don't get something from you, you could eventually face the fact of repaying benefits that you've received.”
“Anybody who doesn't respond in phase one will get another opportunity, we're going to remind them again with notices and paper notices,” she added.
Levy said, if someone knowingly applied for the money and they were not eligible, they could face criminal penalties. If however, they made a mistake, without fault, then they can receive a waiver so they don't have to pay it back.
"We continue to clarify information that helps people which is on our Pandemic Unemployment Assistance page of our EDD website," she said. "Please avail yourself of that information."
Lightman says if these people just ignore the requests, the estimated $20 billion in fraud will likely become part of the federal deficit and many experts predict most of the money will not see the light of day again.
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